American Association of Orthopaedic Executives, "Becoming Managers of Care in Value-Based Medicine"

Published October 21, 2016

By Denny Tritinger

The rising cost of medical care is paving the way for the latest disruptor in healthcare: value-based medicine. Fee-for-service reimbursement is quickly being replaced by new payment models that are based on value rather than quantity. This change can provide huge opportunities for orthopaedics practices, but only if we “do it right.”

The Department of Health and Human Services has set a goal that 90 percent of current fee-for-service payments will be tied to a value-based payment model by 2018. In addition, The Centers for Medicare & Medicaid Services announced in 2015 that 30 percent of all payments would transition to alternative payment models in 2016, with that number increasing to 50 percent by 2018. Following suit, the large commercial payors have committed to operating 75 percent of their business under some value-based payment system by 2020. As physicians, nurses, staff members, and administrators in orthopaedic practices, we know one thing for certain: alternative payment methods are not a passing trend. They’re here to stay and they will require a change in clinical culture and practice operations to be successfully implemented.

What does this change to value-based care mean for orthopaedic providers and their practices? 

Let’s look at a hip replacement under a bundled payment model as an example. In the new value-driven environment, the role of the surgeon will be greatly expanded. The surgeon must accept the role of care manager; designing the care plan and leading the patient through initial consultations and testing, selecting the location for the surgery and performing the hip replacement surgery and directing the patient to the appropriate location for rehab and physical therapy, all while ensuring quality outcomes and controlling costs. Under this expanded role, the surgeon and the orthopaedic practice will be responsible for the entire episode of care, a significant departure from the days when the surgery was the only portion of the episode that the surgeon needed to manage. While many other professionals come in contact with the patient during a hip replacement, the surgeon makes the decisions about the treatment plan, starting with the decision to operate and ending with an evaluation that the patient’s rehab is complete. While this change requires surgeons and their practices to do more work, it also provides us with the opportunity, if managed correctly, to increase efficiencies, improve outcomes, and realize additional revenue.

According to the Advisory Board, “Under bundled payment programs, hospitals, physicians and post-acute care providers can make a profit only if they are able to coordinate with each other to contain the cost of care across the bundled episode.” The benefit to the patient of this shift in clinical culture to care management is that providers will become more holistically focused on the entire episode of care, with the goal of standardizing care practices, providing consistent clinical pathways, and ensuring patient convenience and outcomes. Under this model, rather than care being disjointed, it is connected, data-driven and efficient. It will no longer be enough for our physicians to be recognized as the best surgeon or for the orthopaedic practice to be recognized as the best practice. Physicians must be care managers and their practices must support them through the entire episode of the patient’s musculoskeletal care.

The future of medicine is coming at us fast and the successful practices will be those that support their orthopaedic surgeons in the management of the entire episode of care. Surgeons and their practices must take charge of the patient’s care and the differentiators for their practices will be embedded in the entire episode; from scheduling convenience, to interactions with nurse navigators, to quality of care, outcomes, cost, and even physician bedside manner. 

Only when orthopaedic physicians and their practices deliver favorable clinical outcomes and excellent customer service, while at the same time driving down costs, will our transition to an “episode of care” be considered a success. It’s a new dynamic in healthcare aimed at lowering cost while providing the best patient experience. As orthopedic practice administration, we all need to open our eyes and take the leap into the future.

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